Navigate Volatility With a Dual-Asset Approach

Key Takeaways

Silver is entering its sixth consecutive year of a structural supply deficit, as global production fails to keep pace with the massive demand required for the clean energy transition and AI infrastructure.
While silver’s role in solar panels and EV electronics provides a strong fundamental floor, its industrial sensitivity makes it vulnerable to short-term economic uncertainty and higher-for-longer interest rates.
Investors can navigate this volatility using the Sprott Silver Miners & Physical Silver ETF (SLVR), which combines the stability of physical bullion with the growth potential of mining equities.

Gold stole the headlines in early 2026 before its most recent pullback while silver is currently navigating a complex intersection of structural undersupply and short-term uncertainty. A recent Kitco report included insights from Sprott regarding what gold’s cousin could do in the future.

Like gold, silver rallied to start the year before pulling back towards the end of January. Nonetheless, the precious-industrial metal is still up just over 4% for the year.

Fundamentals Intact

Current price volatility presents a narrative of two competing forces: a massive multi-year deficit and a liquidity-driven macro environment. While investors have been selling off assets like precious metals as a liquidity infusion amidst the equities market volatility, the fundamental drivers for silver remain intact.

In short, the economic forces of supply and demand are at play. The world is simply using more silver than it is producing as noted by John McIntyre, Associate Portfolio Manager at Sprott.

“There’s still expected to be a silver deficit this year, meaning there’ll be more demand than supply this year again, for the sixth year in a row,” McIntyre said. “That’s the fundamental backdrop.”

Silver’s duality fuels this deficit. It can play the roles of both a monetary asset and a critical industrial metal. Silver’s superior conductivity makes it indispensable for solar panels, EV electronics, and high-performance computing. McIntyre warns, however, that this industrial link could be a short-term double-edged sword.

“From the industrial demand side, clearly when you have events like this, you do have to worry about the economy, and people’s desire and willingness to spend, so that would be a negative short term for the price due to potentially lower industrial demand,” McIntyre added.

Navigate Silver Exposure with SLVR

For investors looking for silver exposure, consider the Sprott Silver Miners & Physical Silver ETF (SLVR). SLVR provides blended exposure, combining physical bullion for stability with equity-driven exposure to miners. This diversified exposure could help investors navigate any further volatility in silver.

This blended exposure particularly applies to the current macro environment of “higher-for-longer” rates. McIntyre noted that this can be a “negative for silver” on the investment demand front. Given silver’s sensitivity to price moves in its more expensive cousin, gold, a rally in the precious metal could help “lead [silver]out” of the current pullback, noted McIntyre.

Furthermore, as noted, fundamental demand for silver in the ongoing global electrification should counterbalance any market forces affecting silver as a precious metal.

For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.

Disclosures

An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.

Past performance is no guarantee of future results. One cannot invest directly in an index.

Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.

Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.

Exchange Traded Funds (ETFs): SETM, LITP, URNM, URN, COPP, COPJ, NIKL, SGDM, SGDJ, SLVR, GBUG, METL
Physical Bullion Funds:PHYS, PSLV, CEF, and SPPP.

Gold and precious metals are referred to with terms of art like store of value, safe haven and safe asset. These terms should not be construed to guarantee any form of investment safety. While “safe” assets like gold, Treasuries, money market funds and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal.

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